Analysing the influence of demographics on depositor behaviour

Abstract

Banks are exposed to operational risk events on a daily basis and constitute a large portion of a bank's risk exposure. The most important role of a bank is to establish who their key stakeholders are and to prioritise responsibilities according to these stakeholder characteristics, needs, perceptions and behaviour. This paper made use of hypothetical operational risk events within a bank in order to test how likely depositors will be to withdraw funds from their bank accounts. A non-parametric Spearman correlation and analysis of variation was used to test the relationship between demographical factors and depositors' likelihood to withdraw funds. Concerning the level of education, a negative relationship exists between the level of education and depositors' likelihood to withdraw funds. A negative relationship also exists between the income level and depositors' likelihood to withdraw funds.